The agreement was signed on Thursday at a closed door meeting held at Mountains of the Moon Hotel in Fort Portal town.
The talks were mediated by Capt Mike Mukula on behalf of the government mediator and Inter-religious Council of Uganda.
According to a communique released afterwards, the two kings agreed to work together to restored security and stability in the region.
They also plan to hold join rallies across their kingdoms preaching peace and reconciliation.
At least 45 people have been killed in Kasese and Bundibugyo districts.
The president ordered the deployment of UPDF soldiers to restore calm and restrain the warring factions.
About 200 people have so far been arrested in relation to the clashes that has destabilised the region.